Apple dips toes in mobile wallet waters with Passbook app

Apple has taken the first tentative steps towards the development of a mobile wallet with the introduction of a new app that lets users store all their loyalty cards, passes and tickets in one place.

Integrated into the latest iOS 6 for iPhones and iPads, the Passbook app puts things like store cards, airline boarding passes and concert tickets into a simple wallet display on the device screen.

The app uses geolocation technology to automatically display passes on the user's device lock screen when they may be of use.

Demonstrating the system, Apple used the example of a Starbucks card, which would automatically appear when the customer walks into a store. They can then buy coffee by scanning a QR code or check their balance.

The app will be available when iOS 6 arrives in the Autumn although Apple has not provided details on how many partners it has signed up so far.

Finextra verdict: Apple's Passbook concept looks remarkably similar to Square's CardCase app, presenting coupons and tickets in an attractive easy-to-access user interface. It's presented as a pure loyalty play, but it doesn't take a great leap of the imagination to see credit and debit cards loaded into the wallet - potentially in a future NFC-chipped iPhone release.

Apple currently has 400 million active accounts with credit card details registered for its iTunes store. We can see the store retaining its primacy as a means for paying for digital content, but Apple has no need to make a big play for the wider payments market. Why bother with all the complexities and headaches of setting up a new payment network, when you can ride the existing rails to your destination? For Apple, the objective - as always - is to use its unrivalled expertise in user-friendly digital design to bring more consumers into its own tightly-controlled ecosystem.

Rather than fighting the existing payments infrastructure, Apple's ultimate goal may just be to become a ubiquitous part of that infrastructure by supplying the digital wallets that replace the physical leather variety that we all carry around today. In this way, it becomes the fabled 'one platform that rules them all'.

Comments: (3)

In terms of active users, iTunes stand at 200m, with PayPal and Amazon trailing behind at around 120m each.

Unless iTunes accounts are linked directly to consumers' bank accounts (which they are mostly not), Apple still has to go through Visa/MC "rails" - that's where PayPal has an advantage over iTunes, in terms of own payment network. However, as long as the
need for offline transactions remain, Visa et al still have solid value proposition. It's not the question of "either or"; it's about horses for courses.

Also, mobile wallets appear like mushrooms after rain lately. Yet, none of them are trully
secure, as the latest
hacking incidents demonstrated. How many times would an e-wallet need to be hacked before consumers vote with their thumbs against it?

Looks like Apple is testing the payments waters already: For all the examples around storing e-tickets, loyalty cards and so on, Apple demos Passbook with a payments use case (i.e. Starbucks Prepaid Card). By using a QR code in Passbook, I think Apple is
signaling that it's not going to join the NFC camp, somewhat like PayPal in its new inStore app. Apps like keyring have been available for years for this use case. Apple's differentiation lies in using the lockscreen and location info to eliminate the need
for the user to fire up an app and select one out of the many cards stored inside the app. Far as I know, this is not possible in any other mobile wallet. As usual, Apple is going to thump incumbent players by taking UX to unprecedented heights.